26.1  Default Termination Compensation Amount

On termination of the project agreement resulting from a Default Termination Event, government will pay the private party an amount equal to the fair market value of the Project. If a liquid market exists, Government will determine the fair market value of the project by re-tendering the project in accordance with section 26.1.1. If no liquid market exists, of if government otherwise elects, the Independent Valuer will calculate the Estimated Fair Value of the project as between a willing buyer and willing seller in accordance with section 26.1.2.  In each case the deductions described in section 26.1.3 will apply.

In the case of re-tendering (as described in section 26.1.1), from the Termination Date until the date the Default Termination Compensation Amount is paid, government will pay the private party a post-termination service fee calculated as the full service fee less:

(a)  The greater of all cost components related to the provision of the hard and soft services, and the cost to government of alternative provision of the services;

(b)  cost components related to the provision of insurance; and

(c)  rectification costs incurred by government.

This will generally be deducted from the final Default Termination Compensation Amount.